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7 January 2009
The Wall Street Journal: New ETFs Bank on Social Themes
Source: www.wsj.com
By IAN SALISBURY
Among the busiest areas of the exchange-traded-fund business in 2009 could be socially responsible investing, judging by the crop of ETFs that are awaiting clearance by the Securities and Exchange Commission.
ETFs resemble open-end mutual funds but trade on an exchange like stocks. Originally designed as vehicles for rapid-fire traders such as hedge funds, ETFs have since expanded their popularity to include investors with a far broader range of goals.
There are 721 ETFs with about $478 billion in assets, according to the Investment Company Institute, a trade group.
While ETFs continued to collect new investment dollars through much of last year, the market slide put a halt to the torrent of new funds that launched in 2007. That makes the number of pending socially responsible ETFs all the more notable.
Still, the new funds, whose themes range from environmentalism to Christianity to Islam, could be a tough sell. They will join a handful of socially responsible ETFs already available whose success at attracting investors has been mixed.
PowerShares WilderHill Clean Energy Portfolio has attracted about $630 million since hitting the market in 2005. But that kind of success is relatively rare.
And there have been some flops. Last year one firm, Claymore Securities Inc., shut two of its funds, Claymore/KLD Sudan Free Large-Cap Core ETF and Claymore/LGA Green ETF, amid a lack of investor interest.
Perhaps the best known of the firms planning new ETFs is Pax World Funds, which intends to launch two new ETFs that target North American and overseas companies with strong "environmental, social and governance" records and a third focused on companies that use or develop "environmental technologies."
Another firm, Veritas Funds Inc. of Oklahoma City, plans five funds aimed at investors who wish to incorporate values of various Christian denominations.
The company''s lineup will include Baptist, Roman Catholic, Lutheran and Methodist funds, as well as a "Christian" option tailored to nondenominational evangelicals.
"There will be some doctrinal differences that show up in the funds," said Veritas Chief Executive Garrett Stevens. "There are small differences among all the religions. They may only amount to 5% or 10% of the funds'' holdings, but it''s probably only 5% or 10% of their beliefs that don''t overlap."
At least one proposed ETF targets non-Christians: Javelin Investment Management LLC, of Princeton, N.J., plans to launch the JETS Dow Jones Islamic Market International Index Fund, designed to reflect Islamic law, excluding companies whose businesses involve alcohol, conventional financial services such as banking and insurance, gambling, pornography, tobacco, pork products and weapons.
Federal Reserve Expands Money-Market Facility
The Federal Reserve broadened a program to provide credit for buyers of certain money-market instruments.
The Fed on Wednesday said it will allow U.S.-based securities-lending cash-collateral reinvestment funds, securities lenders and certain local government investment pools to sell to its money-market investor funding facility.
Previously, the Fed had said that only U.S. money-market mutual funds could use the facility.
The Federal Reserve also said that it has lowered the minimum yield on assets eligible to be sold to the facility, cutting it nearly in half to a level currently equal to about 1.1 percentage points.
The facility, launched in late November, is one of many the Fed has created to help calm strained credit markets. As of December''s end, however, the Fed had made no purchases through the facility, its balance sheet showed.
News
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8 January 2009
GreenBiz: Mandatory CSR Reporting for Denmark''s Largest Companies
7 January 2009
The Wall Street Journal: New ETFs Bank on Social Themes
24 December 2008
World Bank: Bonds fighting the Climate Change Increased to SEK 2.7 billion
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SocialFunds: Investors Ask Obama to Improve Corporate Financial Disclosure
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Environmental Leader: Investors Press 100 Companies to Join CEO Water Mandate
16 December 2008
SRI-Adviser: Investors Call on World''s Largest Companies to Join Water Sustainability Effort
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Sustainable Investment Research Platform
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